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Employers’ liability insurance covers your business against any claims made by employees who might experience work-related illnesses or injuries.
This type of insurance is a legal requirement if your business hires staff.
It applies to a range of industries including retail, healthcare, professional services and construction. Any business with employees, whether full-time or part-time, needs this cover. This is so they’ll comply with legal requirements and ensure comprehensive cover.
It’s particularly important for small businesses and start-ups, as they might not have the funds to handle large claims independently. So by securing employers' liability insurance, businesses can focus on growth and operations. Businesses can also have the peace of mind that they are protected against unforeseen employee-related risks.
Employers’ liability insurance covers your business against the cost of any successful claims made against it by employees who develop an illness or suffer an injury due to their work.
It does this by paying some, or all, of any:
Compensation fees your business is ordered to pay if a successful claim is made against it
Legal expenses your business is held liable for if a claim goes to court
Some policies may cover more than this, so always check your policy documents to see exactly what protection you have.
Finding the right business insurance can feel like an overwhelming task, but we’re here to help.
Whether you are a sole trader, start-up or longstanding business, we’ll have a suitable quote that’ll mean your business is safeguarded from unexpected events.
We understand the emotional toll that potential risk and uncertainties can bring to business owners, and our mission is to alleviate that worry.
This is why we work with our partner, Simply Business, to provide tailored business insurance quotes. This means you can focus on what matters - growing your business.
Hire full or part time employees, including apprentices, interns and other types of workers.
Employ contractors to work for you, whether on an ad hoc basis or a more permanent one.
Work with volunteers or other staff who provide you with labour on an unpaid basis.
Your staff are all closely related to you, which includes spouses, children, parents and step family
You only employ people who are based abroad and are not usually resident in the UK.
You’re self employed or only work with others who have an equal share of your business
If you are a sole trader or self-employed and your business doesn’t employ any staff, then you don’t need employers’ liability insurance.
However, there are some instances where businesses are exempt from this type of insurance. For example, if you only employ family members or if you are in equal partnerships with no employees.
But, if you are in one of these situations, then it’s still worth considering this type of insurance just in case something goes wrong. Otherwise, you could be liable to pay compensation and legal fees if something goes wrong.
How much cover you’ll need can vary from business to business.
But legally, you’ll need to get employers’ liability insurance as soon as you become an employer. The policy must also cover your business for at least £5 million. This requirement was set by the Employers’ Liability Act in 1969 and it covers businesses of any risk level and size.
It’s important to be covered for millions of pounds as compensation claims can be very expensive. Generally, insurers can offer £10 million of cover as standard to make sure that all businesses are suitably covered.
If your business doesn’t have cover, every day you’re at risk of being fined a maximum of £2,500.
The number of employees you have. The larger your staff, the higher the chance of one of them sustaining an injury or illness.
The type of industry you’re in. Some industries are riskier than others. The riskier your business, the higher the chance of you making a claim.
The amount of cover you take out. The higher your cover amount, the more you’re likely to pay for your insurance. Reducing the amount of cover you take out could help bring your insurance costs down. Just make sure you take out enough, as you legally have to have £5m in place.
The amount of excess you agree to pay. As with all insurance, opting to pay a higher excess often leads to a cheaper overall insurance quote. Just make sure you can afford to pay the excess you agree to in case you need to claim.
You own a building firm with several workers. While on site, one of your builders falls from a scaffold. They claim they weren’t given adequate training to use the scaffold safely and that their injury has left them with a debilitating fear of heights. They’re now unable to work and are claiming compensation for lost earnings.
You own a marketing agency and take on new staff for a data entry role. The job requires repeated mouse movements that trigger a repetitive strain injury in one of your staff. The staff member claims your failure to provide ergonomic office equipment lead to their injury and files a claim for compensation.
You own a restaurant that has really taken off. You double the amount of diners you used to serve in an evening, but fail to take on any new kitchen staff. This puts a chef you hire on a casual contract under undue stress and they develop a mental health condition as a result. The chef files a compensation claim.
You own a salon and employ two members of staff. One of them is a hairdresser and develops a skin condition due to frequent exposure to hair dye. They claim they weren’t given the right type of gloves to protect their hands and are unable to work due to their condition. They make a claim for loss of earnings as a result.
The quotes you'll get from us are provided by Simply Business, one of the UK’s best known business insurance providers.
They’ve helped more than 3 million businesses since 2005 find the right cover at the right price. This includes everyone from sole traders to large, multi-site operations.
They’re regulated and authorised by the Financial Conduct Authority, too. This means that everything they do is out in the open. Just like every other partner we work with, you can rest assured you’re in safe hands with Simply Business.
Get a quote today and find the cover you need in minutes.
This type of cover works in a similar way to employers’ liability insurance, and can help protect your business against claims made by members of the public. For example, if you own a building firm and a loose scaffold pole falls and hits a passer by. In this type of scenario, you could be held liable. Public liability insurance is there to help you cover the cost of any compensation and resulting legal fees you’re ordered to pay.
If your business provides advice, professional services or handles sensitive client data, you could benefit from professional indemnity insurance. Negligence claims made against you lead to large compensation claims. This includes things like poor advice that causes clients financial harm, or improper handling of sensitive data. Professional indemnity insurance can help you cover the cost if you find yourself dealing with these issues.
This protects your business if you work independently. It's a mix of business insurance policies that can protect you against potential business-related risks. For example, liability claims, business interruptions and health issues. Plus, you can often tailor the cover to include the policies you might need for your line of work. That includes public liability, employers' liability, professional indemnity, income protection, and cyber insurance.
Most employers liability insurance policies come with a few exclusions.
These commonly include:
Reckless acts that result in the injury or illness of one of your employees.
Road accidents, as business car insurance or commercial van insurance should be used to cover your employees here.
Your policy may come with other exclusions too. Always check your policy documents to make sure you know exactly what you’re covered for.
Sometimes it can be tricky to know if someone who’s connected to your business is classed as an employee.
According to the government, there are a few things that define an employee, including if:
They’re required to work unless they’re on leave
They work at the business’ premises, or at a place specified by the business such as working from home
They have a contract that refers to them as a employee
It's important to know if your business technically has employees or not, as this determines whether you need employer's liability insurance or not.
For a full list of definitions, see the government website.
Yes, an ex employee can file a claim against you for injuries or illness they’ve suffered as a result of their time working for you. This makes it doubly important to have insurance in place.
Even if you go out of business, having a policy in place for the time period you hire employees is a good idea. It can help ensure you’re protected if they later make a claim relating to that time period.
You should get employers’ liability insurance as soon as you hire your first employee, whether they are full-time or part-time. Employers' liability insurance is a legal requirement for businesses with employees, ensuring protection against claims related to workplace injuries or illnesses.
Yes, employers' liability insurance is tax deductible. This type of insurance is considered a necessary business expense, and so the premiums you pay for it can be deducted from your taxable income.
Yes, ex-employees can claim against your business under certain circumstances. For example, if an ex-employee develops an illness related to their employment after leaving the company. They can also claim unfair dismissal if they believe their contract was ended without just cause. Employers' liability insurance can help cover these claims.
Page last reviewed: 28/06/2024
Reviewed by: Alex Ryde
Confused.com Business Insurance is provided by Simply Business. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London EC2V 7NG. Our service is free and compares a range of trusted household names. Confused.com is an intermediary and receives commission from Xbridge Limited which is based on a percentage of the total annual premium if you decide to buy through our website. We pride ourselves on impartiality and independence – therefore we don't promote any one insurance provider over another.
